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Retail

Consumers to be hit by Wii price rise

Thu 12 Mar 2009 8:00am GMT / 4:00am EDT / 1:00am PDT
Retail

Chips' MD says trade price hike will force retail to pass on the increase to consumers

Don McCabe, managing director of UK retailer Chips, has spoken out in surprise at Nintendo's price increase of the Wii, suggesting that the videogames giant could have sold the console at the GBP 199.99 price point "from the very beginning".

Speaking to GamesIndustry.biz, McCabe explained how the move by Nintendo was not entirely unexpected, but would impact sales negatively as the price would have to be passed on to the consumer.

"It's a first," he said. "I can't remember any other console that has been launched, been on the market for a couple of years and then gone up in price. It's an absolute first."

"I half expected it," he continued, adding: "I can see their reasons why and there are reasons which are perfectly valid in today's market place - the Pound has been dropping against the Euro for a while now and it shows no sign of bouncing back."

He explained that Nintendo could have probably sold the console at the higher price point since its launch without impacting sales, but that the public perception of the price hike will be negative.

"Hindsight is a wonderful thing, but I think Nintendo could have sold all the machines that they have done at the GBP 199 price point, because we've effectively had shortages from day one, pretty much all the way through."

He added: "There's never ever been quite enough stock in the market place, each Christmas we come to there's always stock shortages."

"It will have a negative effect on the sales... I think we'll still end up with shortages come Christmas again, but through the summer it's going to have an effect."

When asked if there were concerns of more price hikes across different products, McCabe commented: "It wouldn't be unrealistic to expect similar price rises across the whole Nintendo range."

The increase price will almost certainly have to passed on to the consumer, McCabe reasoned, despite any current reports to the contrary.

"I don't think any retailer has got the ability to soak up that sort of margin change," he explained. "I think I saw one story that said the supermarkets wouldn't be passing the price point on but I think they will. I don't think any retailer can take that sort of squeeze."

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